We all know Martha Stewart went to prison for lying to investigators, and not for insider trading. Part of the lesson to be learned in the Martha case was that lying to investigators is a serious matter, or as I like to put it, tell the truth, or shut up. Article
That rule was proven to be true once again. Many will recall the "wrong number" telephone message scam, where a voice mail message is left for the "wrong" person, and the message is a stock tip.
Aside from the fact that the accused scammer faced a civil SEC action, he has just plead guilty to obstructing justice, and faces 20 years in prison - not for the scam, but for "obstructing justice" which usually translates into lying to investigators.
Let's review.
Running a scam - $50,000 and a $25,000 fine.
Lying to the SEC - 20 years in prison
Keeping your mouth shut - priceless.
Telemarketer pleads guilty in pump-and-dump scheme - May. 3, 2005
UPDATE - 5/4/05 - Reuters is reporting that the obstruction charges stem from allegations that the defendants"altered, destroyed and concealed records and documents," and told an "employee to delete company computer files." A variation on the lying theme which is a big more intentional and serious than the Martha series of events, but equally demonstrating the point - screwing with the SEC can get you more time than the underlying acts or allegations.
Reuters Article
